THE GREAT SLOWDOWN - Update

Recently I published a piece on the Great Slowdown where I focussed on the contradiction between comments that the consumer was in good shape versus that personal debt was at an all-time high.*

Further support for the comment that the consumer is in bad shape is a recent article saying that the AVERAGE credit debt of Millenials is $27,900!**
Millennials (defined here as ages 23 to 38) have racked up an average of $27,900 in personal debt, excluding mortgages, according to Northwestern Mutual’s 2019 Planning & Progress Study. The findings are based on a survey conducted by The Harris Poll of over 2,000 U.S. adults.**

This is incredible.  Just to service that sort of debt much approximate $5,000/yr assuming that the interest rate they are paying is something over 17%, wasted money.  That sounds like this group of consumers must be pretty well tapped out on credit card debt.

The Chairman of FedEx is also gloomy:
FedEx Chairman and CEO Fred Smith expressed extreme pessimism about the global economy on the delivery giant’s post-earnings conference call with analysts.
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On the call with analysts, Smith said, “I think there is a lot of whistling past the graveyard about the U.S. consumer and the United States economy versus what’s going on globally.” 

Experts are divided at just how serious the slowdown is.  The fed has lowered the Funds rate by another quarter of a percent to 1.75% - 2.00%.  Such a rate is highly inflationary.  Ordinarily, this sort of thing would mean the Fed is worried about a recession.   One Fed member pointed out that the manufacturing industry is already in a recession. One group of people to be hurt by the recent lowerings of the Fed Funds Rate is the retirees as savings rates decline with the rate cut.
On the flip side, consumers likely will earn less interest on their savings accounts, and in some cases, lose buying power over time.****

* http://stopcontinentaldrift.blogspot.com/2019/08/the-great-slowdown.html
** https://www.cnbc.com/2019/09/18/student-loans-are-not-the-no-1-source-of-millennial-debt.html
*** https://www.cnbc.com/2019/09/18/cramer-says-fedex-call-was-extremely-dispiriting-about-the-economy.html
**** https://www.cnbc.com/2019/09/20/feds-james-bullard-says-cutting-rates-by-a-bigger-half-percentage-point-would-have-been-more-appropriate.html
https://www.cnbc.com/2019/09/18/heres-what-the-feds-interest-rate-cut-means-for-your-wallet.html